Which sections of the B Bops agreement define the restrictions included in the non-disclosure and non-competition agreement required for transfers outside of Sections 13(A) or 13(B)?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
Other Transfers. Company will not unreasonably withhold its consent to any transfer not falling within the scope of Sections 13(A) or 13(B) above, provided that Company may in its discretion require that one or more of the following conditions be satisfied prior to, or concurrently with, the effective date of such transfer:
- (1) The transferee shall be of good moral character and reputation, have the financial capacity to develop the Units in accordance with the Development Schedule, have business qualifications reasonably acceptance to Company and otherwise meet Company's then current standards for developers. Developer shall provide Company with such information as Company may reasonably require to make such a determination concerning each proposed transferee;
- (2) The transferee shall enter into a written assignment in a form satisfactory to Company, assuming and agreeing to be bound by and discharge all of Developer's obligations imposed by this Agreement, and, if the obligations of Developer were guaranteed by the transferor, the transferee shall execute a guaranty in form and substance acceptable to Company;
- (3) Developer (and such partners, shareholders or members thereof as Company may direct), or the individual partner, shareholder or member thereof proposing to make such transfer, shall execute a general release of all claims against Company and its affiliates and their respective directors, officers, agents and employees;
- (4) Developer (and such partners, shareholders or members thereof as Company may direct), or the individual partner, shareholder or member thereof proposing to make the transfer, shall execute a nondisclosure and noncompetition agreement in favor of Company containing the restrictions set forth in Sections 10 and 12 of this Agreement;
- (5) Developer shall have fully paid and satisfied all of Developer's obligations owing to Company under this Agreement and any Unit Franchise
Agreement between the parties, and shall have fully paid a transfer fee of Three Thousand Dollars ($3,000) to Company for supervisory, administrative, accounting, legal and other expenses incurred by Company in connection with such transfer;
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops' 2025 Franchise Disclosure Document, if a developer seeks to transfer their development rights outside the specific conditions outlined in Sections 13(A) or 13(B) of the agreement, B Bops may require, among other conditions, that the transferring developer execute a non-disclosure and non-competition agreement. The specific restrictions that would be included in this agreement are detailed in Sections 10 and 12 of the B Bops agreement.
Section 12 outlines the covenant not to compete, specifying that during the term of the agreement, the developer cannot engage in any business that is the same as or substantially similar to a B Bops Restaurant, except for units they own under a Unit Franchise Agreement. Following the termination or expiration of the agreement, this restriction extends for two years within the Trade Area or a 20-mile radius of any B Bops Restaurant. The agreement defines a business as "substantially similar" if it prepares and serves food items included on the standard B Bops menu.
While the excerpt mentions Section 12 regarding non-competition, it does not provide details on Section 10, which also defines restrictions included in the non-disclosure and non-competition agreement. A prospective franchisee should review the full agreement to understand the restrictions outlined in Section 10.